Source: U.S. Energy Information Administration, with data from Bentek Energy LLCNote: The Southwest includes Arizona, Nevada, and New Mexico. GTN Pipeline and Ruby Pipeline inflows measured from the Malin Compressor Station in Malin, Oregon. Kern River Pipeline inflows measured from the Veyo Compressor Station in Veyo, Utah. El Paso Pipeline inflows measured from multiple receipt points in New Mexico.Note: Northwest Pipeline transports natural gas from Opal to the Pacific Northwest.

On April 23, one of the five units exploded and caught on fire at the Opal gas processing plant in southwest Wyoming. Yesterday, Williams Company, Opal's operator, brought two of the plant's remaining four units back into service. These two units can process 0.40 billion cubic feet per day (Bcf/d) of natural gas, and Williams is working to bring the remaining two units not directly affected by the explosion back on line. Combined, these four units can process 1.10 billion cubic feet per day (Bcf/d), enough to restore the plant to its daily processing volume prior to the explosion, which was 1.00 Bcf/d, or 1.5% of total U.S. dry natural gas production in 2013. Total plant processing capacity for all five units is 1.50 Bcf/d. While the plant has been down, natural gas pipeline flows into California and the Southwest (Arizona, Nevada, and New Mexico) from the Permian Basin in West Texas and New Mexico, and rerouted production from the Rockies, have offset lost output from Opal. This has limited natural gas price increases in the region that could result from temporary supply shortages.

As the natural gas spot price increased at Opal Hub in response to a tighter supply/demand balance for Rockies natural gas production flowing west, the availability of Permian production on El Paso relieved some of the upward pressure on spot prices at Opal and other Rockies trading points, which remained below the national benchmark spot price at the Henry Hub in Erath, Louisiana. For the past month, the Opal spot price and most Rockies prices have generally traded at a discount to the national benchmark spot price at Henry Hub. While prices increased somewhat in the days following the explosion, most prices in the Rockies remained several cents per million British thermal units below Henry Hub.

The explosion at the Opal plant, as well as processing plant maintenance problems in the Northeast, led to declines in total U.S. dry production last week. Between April 22 and April 24, daily dry production ranged between 66.4 Bcf/d and 66.8 Bcf/d, which represents a decline of between 1% and 1.5% from the previous 30-day average. The effect of the processing plant explosion on total production has been much less than cold weather-related disruptions to Rockies production that occurred this winter.